Manorial Rights Indemnity Insurance Mortgage Company conveyancing requirements
Chelsea BS and Godiva Mortgages, like most banks, dictate their own specific instructions when it comes to manorial rights indemnity insurance. This page sets out to enlighten conveyancing solicitors on the various bank conveyancing panel where the title for the the property to be mortgaged incorporates manorial rights. It is not a substitute for checking the CML handbook requirements for each bank, whether it be HSBC, Lloyds TSB or Natwest. The information on this page is not focused on manorial rights indemnity insurance requirements.
Need help with manorial rights indemnity insurance from your lender?
Halifax and Santander like many mortgage companies, requirements are that where manorial rights indemnity insurance is to be put on risk:
- your firm must disclose to the insurer all relevant information which you have gathered
- the manorial rights indemnity insurance policy should not incorporate terms which you know would void or compromise the interests of the lender
- the manorial rights indemnity insurance policy should always be for the benefit of the lender and, if possible, for the benefit of the borrower and any subsequent owner or bank. Where the mortgagor will not be covered by the manorial rights indemnity insurance policy, the mortgagor should be advised accordingly.
- your firm must provide a copy of the manorial rights indemnity insurance to the borrower and explain to the mortgagor why the manorial rights indemnity insurance policy was effected and that a further policy might be necessary if there is additional lending against the security of the property
- the limit of indemnity must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- your practice are responsible for approving the terms of the manorial rights policy on behalf of the lender
- your practice must explain to the mortgagor that the borrower is obliged to comply with any conditions of the manorial rights indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in relation to the insurance
- the manorial rights indemnity insurance policy must be effected without cost to the bank
| Lender | Requirement |
|---|---|
| Better HomeOwnership | An amount to cover the mortgage advance as a minimum. |
| Britannia | Cover to the full value of the property. |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| Fleet Mortgages | An amount at least equal to the valuation of the property. |
| Halifax | An amount at least equal to the mortgage advance. |
| Hampden | The open market value of the property according to the valuation report. |
| Investec | The open market value of the property according to the valuation report. |
| Lloyds TSB Scotland | The value of the property |
| Mortgage Express | Amount of loan + 15% |
| National Westminster Bank | An amount equal to the value of the property. |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Perenna | The higher of the purchase price or valuation. |
| Principality Building Society | Full market value of the property is preferred but if this is not available we will accept the loan advance amount as minimum. You must approve the policy on our behalf. The estimated property value is stated in the Mortgage Offer in remortgage cases. Otherwise it will be stipulated in the Valuation. |
| Secure Trust Bank | An amount at least equal to the market value. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| Together Personal Finance | Minimum of £2,000,000.00 per claim. |
| Topaz Finance | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
| Virgin | We require the full market value of the Property. Where this isn't available, we'll accept the loan amount as a minimum. |
| Whistletree | The value of the property |
| Zephyr Mortgages | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
Manorial Rights Contingency Insurance : Reflections
The full terms, conditions and exclusions for manorial rights indemnity insurance are explained in the policy document. Conveyancing Practitioners are obliged to direct the borrower to the manorial rights indemnity insurance policy paperwork. The intention of manorial rights indemnity insurance is to provide indemnity in respect of the risks set out in the policy schedule - so it is essential check the document to determine that it is in order. The lifetime of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Manorial Rights indemnity insurance: Important features and benefits:
The insurance will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the manorial rights indemnity insurance schedule. Manorial Rights indemnity insurance Policies should be checked for the following- Diminution in value due to the successful enforcement of the risks specified in the manorial rights indemnity insurance.
- Money paid with the written consent of the insurance company to liberate the land from the risks specified in the manorial rights policy.
- The cost of altering or demolishing all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the manorial rights policy, to the extent that such costs are rendered abortive by court order.
- Cover for compensation incurred in any action concerning the risks specified in the manorial rights indemnity insurance, including incurred costs and expenses.
As is the case with all conventional insurance, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the manorial rights policy will be invalidated.
Manorial Rights Indemnity Insurance has limitations - Supplemental considerations
Manorial Rights insurance may satisfy lenders such as Barclays or Barnsley BS and prevent clients from from suffering financially but it cannot compensate for the stress and inconvenience the emotional suffering - after all the value of a home cannot always be measured in cash in the eyes of the owner. Content on this webpage is for general information for Regulated law firms in England and Wales on the the bank approved panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most manorial rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above covers to properties in England and Wales.